Futures on the RTS Index expiring this month advanced 0.6
percent to 151,520 on March 1 in U.S. hours. American depositary
receipts of Mechel, Russia’s biggest maker of steelmaking coal,
dropped 5.2 percent in the week, extending its 2013 loss to 22
percent, as the price of the metal tumbled. The Bloomberg
Russia-US Equity Index of the most traded Russian companies
completed its worst week since the five days ended Jan. 11 after
a monthlong slump in commodities.

American factories expanded in February at the fastest pace
in almost two years while consumer spending increased in
January, bolstering prospects that demand for Russia’s energy
exports will rise even as oil fell for a second week. Crude,
together with natural gas, account for about half of the
nation’s budget revenue.

“There is hope,” Mark Rubinstein, the head of research at
IFC Metropol in Moscow, said by phone on March 1. “Investors
look for indications on potential demand for Russian exports and
as the U.S. economy looks promising, it gives some optimism.”

The Bloomberg Russia-US Equity Index has risen 0.8 percent
this year, while the nation’s 50-stock Micex Index has dropped
less than 0.1 percent. The Standard & Poor’s 500 Index has
rallied 6.5 percent so far in 2013.

ETF Slides

The Market Vectors Russia ETF, the largest dedicated
Russian exchange-traded fund, fell 1.9 percent last week to
$28.81. The RTS Volatility Index, which measures expected swings
in the stock futures, fell 3.5 percent to 21.56 in U.S. hours
March 1.

Mechel has led the declines in the Micex this year,
tumbling 18 percent, amid a drop in commodity prices. The S&P
GSCI Spot Index of 24 raw materials has slipped 0.6 percent in
2013. The gauge completed a fourth weekly slump. U.S. shares of
OAO GMK Norilsk Nickel, the world’s largest producer of nickel,
and OAO Gazprom, Russia’s biggest company, have fallen at least
7.7 percent in 2013.

Oil slipped as two manufacturing indexes in China, the
world’s biggest consuming country of the commodity after the
U.S., showed a slower-than-estimated pace of expansion.

The price of metallurgical coal at the port of Queensland
in Australia was unchanged at $171 a ton on Feb. 22, according
to data compiled by Bloomberg from Energy Publishing Inc., a
trade publication. The steelmaking raw material has tumbled 17
percent as global production of the metal has slumped. Globally
steelmakers used 71 percent of their capacity on Jan. 13,
compared with 75.3 percent a year earlier, according to the
most recent data provided by the World Steel Association.

Most Indebted

With net debt of $9.3 billion as of Dec. 1, according to
its website, Mechel is the most indebted Russian mining company
after the world’s biggest aluminum producer United Co. Rusal.

“Mechel and the entire mining industry suffer from a
decline in commodities prices,” Valentina Bogomolova, an
analyst at UralSib Financial Corp., said by phone from Moscow on
March 1. “Mechel depends on steel and coal prices even more
than peers, because of its debt burden.”

OAO Mobile TeleSystems, Russia’s biggest mobile phone
operator, rose 1.4 percent to $20.98 on March 1, the highest
level since May 2011. The stock had the biggest advance on the
Bloomberg Russia-U.S. Index last week, adding 2 percent.

Crude oil for April delivery slid 1.5 percent to $90.68 a
barrel on the New York Mercantile Exchange, the lowest
settlement since Dec. 24. Prices fell 2.6 percent last week.
Brent crude for April settlement on the ICE Futures Europe
exchange declined 0.9 percent to $110.40 a barrel. Urals crude
slid 0.4 percent to $107.32, to cap a 4.2 percent decline last
week.

Russia’s ruble declined 0.5 percent to 30.6990 per dollar
on March 1. The currency lost 0.1 percent to 34.8743 against the
dollar-euro basket used by Russia’s central bank to manage
swings that erode exporter competitiveness.